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Minnesota Chippewa Tribe - Leech Lake Band - Tribal Code

 

Title 9. Secured Transactions Ordinance
Chapter 6. Default

SUBCHAPTER 1. DEFAULT AND ENFORCEMENT OF SECURITY INTERESTS
TITLE 9-601. RIGHTS AFTER DEFAULT; JUDICIAL ENFORCEMENT; CONSIGNOR OR BUYER OF ACCOUNTS, CHATTEL PAPER, PAYMENT INTANGIBLES, OR PROMISSORY NOTES
TITLE 9-602. WAIVER AND VARIANCE OF RIGHTS AND DUTIES
TITLE 9-603. AGREEMENT ON STANDARDS CONCERNING RIGHTS AND DUTIES
TITLE 9-604. PROCEDURE IF SECURITY AGREEMENT COVERS REAL PROPERTY OR FIXTURES
TITLE 9-605. UNKNOWN DEBTOR OR SECONDARY OBLIGOR
TITLE 9-606. [RESERVED.]
TITLE 9-607. COLLECTION AND ENFORCEMENT BY SECURED PARTY
TITLE 9-608. APPLICATION OF PROCEEDS OF COLLECTION OR ENFORCEMENT; LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS
TITLE 9-609. SECURED PARTYS LIMITED RIGHT TO TAKE POSSESSION AFTER DEFAULT
TITLE 9-610. DISPOSITION OF COLLATERAL AFTER DEFAULT
TITLE 9-611. NOTIFICATION BEFORE DISPOSITION OF COLLATERAL
TITLE 9-612. TIMELINESS OF NOTIFICATION BEFORE DISPOSITION OF COLLATERAL
TITLE 9-613. CONTENTS AND FORM OF NOTIFICATION BEFORE DISPOSITION OF COLLATERAL
TITLE 9-614. [RESERVED.]
TITLE 9-615. APPLICATION OF PROCEEDS OF DISPOSITION; LIABILITY FOR DEFICIENCY AND RIGHT TO SURPLUS
TITLE 9-616. EXPLANATION OF CALCULATION OF SURPLUS OR DEFICIENCY
TITLE 9-617. RIGHTS OF TRANSFEREE OF COLLATERAL
TITLE 9-618. RIGHTS AND DUTIES OF CERTAIN SECONDARY OBLIGORS
TITLE 9-619. TRANSFER OF RECORD OR LEGAL TITLE
TITLE 9-620. ACCEPTANCE OF COLLATERAL IN FULL OR PARTIAL SATISFACTION OF OBLIGATION; NOTIFICATION OF PROPOSAL; EFFECT OF ACCEPTANCE; COMPULSORY DISPOSITION OF COLLATERAL
TITLE 9-621. [RESERVED.]
TITLE 9-622. [RESERVED.]
TITLE 9-623. RIGHT TO REDEEM COLLATERAL
TITLE 9-624. WAIVER

SUBCHAPTER 2. NONCOMPLIANCE WITH [ACT]
TITLE 9-625. REMEDIES FOR SECURED PARTYS FAILURE TO COMPLY WITH ORDINANCE
TITLE 9-626. ACTION IN WHICH DEFICIENCY OR SURPLUS IS IN ISSUE
TITLE 9-627. DETERMINATION OF WHETHER CONDUCT WAS COMMERCIALLY REASONABLE
TITLE 9-628. NONLIABILITY AND LIMITATION ON LIABILITY OF SECURED PARTY; LIABILITY OF SECONDARY OBLIGOR
TITLE 9-629. ATTORNEYS FEES IN CERTAIN TRANSACTIONS

SUBCHAPTER 1. DEFAULT AND ENFORCEMENT OF SECURITY INTERESTS

LLOjibwe JCT9 STO § 9-601
9-601. Rights After Default; Judicial Enforcement; Consignor or Buyer of Accounts, Chattel Paper, Payment Intangibles, or Promissory Notes

(a) Rights of secured party after default. After default, a secured party has the rights provided in this chapter, the rights and duties related to possession or control of collateral (Title 9-204) and, except as otherwise provided in the provisions of this ordinance dealing with waivers and variances of rights and duties (Title 9-602), those provided by agreement of the parties. A secured party:

(1) may reduce a claim to judgment, foreclose, or otherwise enforce the claim, security interest, by any available judicial procedure; and

(2) if the collateral is documents, may proceed either as to the documents or as to the goods they cover.

(b) Rights cumulative; simultaneous exercise. The rights under subsections (a) are cumulative and may be exercised simultaneously.

(c) Reserved.

(d) Rights of debtor and obligor. Except as otherwise provided in subsection (g) and under the provisions of this ordinance dealing with an unknown debtor or a secondary obligor (Title 9-605), after default, a debtor and an obligor have the rights provided in this chapter and by agreement of the parties.

(e) Lien of levy after judgment. If a secured party has reduced its claim to judgment, the lien of any levy that may be made upon the collateral by virtue of an execution based upon the judgment relates back to the earliest of:

(1) the date of perfection of the security interest in the collateral;

(2) the date of filing a financing statement covering the collateral; or

(3) any date specified in a statute under which the lien was created.

(f) Execution sale. A sale pursuant to an execution is a foreclosure of the security interest by judicial procedure within the meaning of this section. A secured party may purchase at the sale and thereafter hold the collateral free of any other requirements of this ordinance.

(g) Consignor or buyer of certain rights to payment. Except as otherwise provided in the provisions of this ordinance dealing with commercially reasonable collection and enforcement (Title 9-606(b)), this part imposes no duties upon a secured party that is a consignor or is a buyer of accounts, chattel paper, payment intangibles, or promissory notes.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-601, LLOjibwe JCT9 STO § 9-601



LLOjibwe JCT9 STO § 9-602
9-602. Waiver and Variance of Rights and Duties

Except as otherwise provided in the provisions of this ordinance dealing with waivers (Title 9-624), to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the rules stated in the following sections of this ordinance dealing with:

(1) rights and duties when collateral is in a secured party's possession (Title 9-204);

(2) requests for an accounting or requests regarding a list of collateral or statement of an account (Title 9-207);

(3) commercially reasonable collection and enforcement (Title 9-607(b));

(4) application of proceeds, deficiency and surplus (Titles 9-608(a) and 9-615(c)), to the extent that they deal with application or payment of noncash proceeds of collection, enforcement, or disposition;

(5) application of proceeds and the like (Titles 9-608 and 9-615(d)), to the extent that they require accounting for or payment of surplus proceeds of collateral;

(6) a secured party's right to take possession after default and limitations thereon (Title 9-609), to the extent that it imposes upon the secured party taking possession of collateral without judicial process the duty to do so without breach of the peace and with consent of the debtor;

(7) commercially reasonable disposition (Title 9-610(b)), notification before disposition of the collateral (Title 9-611), and the contents and form of a notification before disposition of the collateral (Title 9-613);

(8) calculation of a deficiency or surplus when the fairness of the amount of proceeds is placed in issue (Title 9-615(e));

(9) explanation of the calculation of a surplus or deficiency (Title 9-616);

(10) acceptance of collateral in satisfaction of obligation (Title 9-620);

(11) right to redeem collateral (Title 9-623);

(12) waivers (Title 9-624);

(13) the secured party's liability for failure to comply with this ordinance (Titles 9-625 and 9-626); and

(14) attorney's fees (Title 9-629).

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-602, LLOjibwe JCT9 STO § 9-602




LLOjibwe JCT9 STO § 9-603
9-603. Agreement on Standards Concerning Rights and Duties

The parties may determine by agreement the standards measuring the fulfillment of the rights of a debtor or obligor and the duties of a secured party under a rule stated in the provisions of this ordinance dealing with waiver or variance of rights and duties (Title 9-603), if the standards are not manifestly unreasonable.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-603, LLOjibwe JCT9 STO § 9-603




LLOjibwe JCT9 STO § 9-604
9-604. Procedure if Security Agreement Covers Real Property or Fixtures

(a) Enforcement: personal and real property. If a security agreement covers both personal and real property, a secured party may proceed:

(1) under this chapter as to the personal property without prejudicing any rights with respect to the real property; or

(2) as to both the personal property and the real property in accordance with the rights with respect to the real property, in which case the other provisions of this chapter do not apply.

(b) Enforcement: fixtures. Subject to subsection (c), if a security agreement covers goods that are or become fixtures, a secured party may proceed:

(1) under this part; or

(2) in accordance with the rights with respect to real property, in which case the other provisions of this chapter do not apply.

(c) Removal of fixtures. Subject to the other provisions of this chapter, if a secured party holding a security interest in fixtures has priority over all owners and encumbrancers of the real property, the secured party, after default, may remove the collateral from the real property.

(d) Injury caused by removal. A secured party that removes collateral shall promptly reimburse any encumbrancer or owner of the real property, other than the debtor, for the cost of repair of any physical injury caused by the removal. The secured party need not reimburse the encumbrancer or owner for any diminution in value of the real property caused by the absence of the goods removed or by any necessity of replacing them. A person entitled to reimbursement may refuse permission to remove until the secured party gives adequate assurance for the performance of the obligation to reimburse.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-604, LLOjibwe JCT9 STO § 9-604




LLOjibwe JCT9 STO § 9-605
9-605. Unknown Debtor or Secondary Obligor

A secured party does not owe a duty based on its status as secured party:

(1) to a person that is a debtor or obligor, unless the secured party knows:

(A) that the person is a debtor or obligor;

(B) the identity of the person; and

(C) how to communicate with the person; or

(2) to a secured party or lien holder that has filed a financing statement against a person, unless the secured party knows:

(A) that the person is a debtor; and

(B) the identity of the person.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-605, LLOjibwe JCT9 STO § 9-605




LLOjibwe JCT9 STO § 9-606
9-606. [Reserved]

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-606, LLOjibwe JCT9 STO § 9-606




LLOjibwe JCT9 STO § 9-607
9-607. Collection and Enforcement by Secured Party

(a) Collection and enforcement generally. If so agreed, and in any event after default, a secured party:

(1) may notify an account debtor or other person obligated on collateral to make payment or otherwise render performance to or for the benefit of the secured party;

(2) may take any proceeds to which the secured party is entitled under Title 9-311;

(3) may enforce the obligations of an account debtor or other person obligated on collateral and exercise the rights of the debtor with respect to the obligation of the account debtor or other person obligated on collateral to make payment or otherwise render performance to the debtor, and with respect to any property that secures the obligations of the account debtor or other person obligated on the collateral;

(b) Commercially reasonable collection and enforcement. A secured party shall proceed in a commercially reasonable manner if the secured party:

(1) undertakes to collect from or enforce an obligation of an account debtor or other person obligated on collateral; and

(2) is entitled to charge back uncollected collateral or otherwise to full or limited recourse against the debtor or a secondary obligor.

(c) Expenses of collection and enforcement. A secured party may deduct from the collections made pursuant to subsection (c) reasonable expenses of collection and enforcement, including reasonable attorney's fees and legal expenses incurred by the secured party.

(d) Duties to secured party not affected. This title does not determine whether an account debtor, bank, or other person obligated on collateral owes a duty to a secured party.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-607, LLOjibwe JCT9 STO § 9-607




LLOjibwe JCT9 STO § 9-608
9-608. Application of Proceeds of Collection or Enforcement; Liability for Deficiency and Right to Surplus

(a) Application of proceeds, surplus, and deficiency if obligation secured. If a security interest secures payment or performance of an obligation, the following rules apply:

(1) A secured party shall apply or pay over for application the cash proceeds of collection or enforcement under Title 9-607 in the following order to:

(A) the reasonable expenses of collection and enforcement and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;

(B) the satisfaction of obligations secured by the security interest under which the collection or enforcement is made; and

(C) the satisfaction of obligations secured by any subordinate security interest in or other lien on the collateral subject to the security interest under which the collection or enforcement is made if the secured party receives a signed demand for proceeds before distribution of the proceeds is completed.

(2) If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder complies, the secured party need not comply with the holder's demand under paragraph (1)(C).

(3) A secured party need not apply or pay over for application noncash proceeds of collection and enforcement under Title 9-607 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.

(4) A secured party shall account to and pay a debtor for any surplus, and the obligor is liable for any deficiency.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-608, LLOjibwe JCT9 STO § 9-608


LLOjibwe JCT9 STO § 9-609
9-609. Secured Party's Limited Right to Take Possession After Default

(a) Consent or judicial process. Unless otherwise agreed, a secured party has at the time of or after default the powers described in subsection (b), but such powers may be exercised only pursuant to judicial process or with the debtor's consent. Such consent is effective only if expressed after default by means of a separate dated and signed personal statement in the debtor's handwriting, describing the powers to be exercised by the secured party and expressly acknowledging and waiving the debtor's right to require that such exercise be pursuant to judicial process.

(b) Possession, rendering equipment unusable and assembly of collateral. Under the circumstances of subsection (a) the secured party may:

(1) take possession of the collateral;

(2) without removal, render equipment unusable and dispose of collateral on a debtor's premises under Title 9-610; and

(3) require the debtor to assemble the collateral and make it available to the secured party at a place to be designated by the secured party which is reasonably convenient to both parties.

(c) No breach of the peace. A secured party acting pursuant to the debtor's consent under subsection (a) must proceed without breach of the peace.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-609, LLOjibwe JCT9 STO § 9-609



LLOjibwe JCT9 STO § 9-610
9-610. Disposition of Collateral After Default

(a) Disposition after default. After default, a secured party may sell, lease, license, or otherwise dispose of any or all of the collateral in its present condition or following any commercially reasonable preparation or processing.

(b) Commercially reasonable disposition; tribal business day. Every aspect of a disposition of collateral, including the method, manner, time, place, and other terms, must be commercially reasonable. If commercially reasonable, a secured party may dispose of collateral by public or private proceedings, by one or more contracts, as a unit or in parcels, and at any time and place and on any terms. In order to protect the debtor's right to redeem collateral (Title 9-623), a disposition of collateral shall take place only on a tribal business day.

(c) Purchase by secured party. A secured party may purchase collateral:

(1) at a public disposition; or

(2) at a private disposition only if the collateral is of a kind that is customarily sold on a recognized market or the subject of widely distributed standard price quotations.

(d) Warranties on disposition. A contract for sale, lease, license, or other disposition includes the warranties relating to title, possession, quiet enjoyment, and the like which by operation of law accompany a voluntary disposition of property of the kind subject to the contract.

(e) Disclaimer of warranties. A secured party may disclaim or modify warranties under subsection (d):

(1) in a manner that would be effective to disclaim or modify the warranties in a voluntary disposition of property of the kind subject to the contract of disposition; or

(2) by communicating to the purchaser a record evidencing the contract for disposition and including an express disclaimer or modification of the warranties.

(f) Record sufficient to disclaim warranties. A record is sufficient to disclaim warranties under subsection (e) if it indicates “There is no warranty relating to title, possession, quiet enjoyment, or the like in this disposition” or uses words of similar import.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-610, LLOjibwe JCT9 STO § 9-610




LLOjibwe JCT9 STO § 9-611
9-611. Notification Before Disposition of Collateral

(a) “Notification date.” In this section, “notification date” means the earlier of the date on which:

(1) a secured party sends to the debtor and any secondary obligor a signed notification of disposition by United States Postal Office certified mail; or

(2) the debtor and any secondary obligor waive the right to notification.

(b) Notification of disposition required. Except as otherwise provided in subsection (d), a secured party that disposes of collateral under Title 9-610 shall send to the persons specified in subsection (c) a reasonable signed notification of disposition by United States Postal Office certified mail.

(c) Persons to be notified. To comply with subsection (b), the secured party shall send a signed notification of disposition to:

(1) the debtor;

(2) any secondary obligor; and

(3) if the collateral is other than consumer goods:

(A) any other person from which the secured party has received, before the notification date, a signed notification of a claim of an interest in the collateral;

(B) any other secured party or lien holder that, fourteen (14) calendar days before the notification date, held a security interest in or other lien on the collateral perfected by the filing of a financing statement that:

(i) identified the collateral;

(ii) was indexed under the debtor's name as of that date; and

(iii) was filed in the office in which to file a financing statement against the debtor covering the collateral as of that date; and

(C) any other secured party that, fourteen (14) calendar days before the notification date, held a security interest in the collateral perfected by compliance with other applicable law (Title 9-311).

(d) Subsection (b) inapplicable: perishable collateral; recognized market. Subsection (b) does not apply if the collateral is perishable or threatens to decline speedily in value or is of a type customarily sold on a recognized market.

(e) Compliance with subsection (c)(3)(B). A secured party complies with the requirement for notification prescribed by subsection (c)(3)(B) if:

(1) not later than twenty (20) calendar days or earlier than thirty (30) calendar days before the notification date, the secured party requests, in a commercially reasonable manner, information concerning financing statements indexed under the debtor's name in the office indicated in subsection (c)(3)(B); and

(2) before the notification date, the secured party:

(A) did not receive a response to the request for information; or

(B) received a response to the request for information and sent a signed notification of disposition by United States Postal Office certified mail to each secured party or other lien holder named in that response whose financing statement covered the collateral.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-611, LLOjibwe JCT9 STO § 9-611




LLOjibwe JCT9 STO § 9-612
9-612. Timeliness of Notification Before Disposition of Collateral

(a) Reasonable time is question of fact. Except as otherwise provided in subsection (b), whether a notification is sent within a reasonable time is a question of fact.

(b) Safe harbors for sufficiency of time. Unless a specific time for sending a notification of disposition is established by the Court, a notification of disposition is sent within a reasonable time before the disposition when it is sent after default and:

(1) in a consumer transaction, twenty (20) calendar days or more before the earliest time of disposition set forth in the notification; or

(2) in all other transactions, ten (10) calendar days or more before the earliest time of disposition set forth in the notification.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-612, LLOjibwe JCT9 STO § 9-612

 




LLOjibwe JCT9 STO § 9-61
9-613. Contents and Form of Notification Before Disposition of Collateral

The following rules apply to notification before disposition of collateral:

(1) The contents of a notification of disposition are sufficient if the notification:

(A) describes the debtor and the secured party;

(B) describes the collateral that is the subject of the intended disposition;

(C) states the method of intended disposition;

(D) states that the debtor is entitled to an accounting of the unpaid indebtedness and states the charge, if any, for an accounting;

(E) states the time and place of a public disposition or the time after which any other disposition is to be made;

(F) describes any liability for a deficiency by the person receiving the notice; and

(G) states a telephone number or mailing address from which additional information concerning redemption, disposition and the obligation secured is available.

(2) Whether the contents of a notification that lacks any of the information specified in paragraph (1) are nevertheless sufficient is a question of fact.

(3) The contents of a notification providing substantially the information specified in paragraph (1) are sufficient, even if the notification includes:

(A) information not specified by that paragraph; or

(B) minor errors that are not seriously misleading.

(4) A particular phrasing of the notification is not required.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-613, LLOjibwe JCT9 STO § 9-613




LLOjibwe JCT9 STO § 9-614
9-614. [Reserved]

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-614, LLOjibwe JCT9 STO § 9-614




LLOjibwe JCT9 STO § 9-615
9-615. Application of Proceeds of Disposition; Liability for Deficiency and Right to Surplus

(a) Application of proceeds. A secured party shall apply or pay over for application the cash proceeds of disposition under Title 9-610 in the following order to:

(1) the reasonable expenses of retaking, holding, preparing for disposition, processing, and disposing, and, to the extent provided for by agreement and not prohibited by law, reasonable attorney's fees and legal expenses incurred by the secured party;

(2) the satisfaction of obligations secured by the security interest under which the disposition is made;

(3) the satisfaction of obligations secured by any subordinate security interest in or other subordinate lien on the collateral if:

(A) the secured party receives from the holder of the subordinate security interest or other lien a signed demand for proceeds before distribution of the proceeds is completed; and

(B) in a case in which a consignor has an interest in the collateral, the subordinate security interest or other lien is senior to the interest of the consignor; and

(4) a secured party that is a consignor of the collateral if the secured party receives from the consignor a signed demand for proceeds before distribution of the proceeds is completed.

(b) Proof of subordinate interest. If requested by a secured party, a holder of a subordinate security interest or other lien shall furnish reasonable proof of the interest or lien within a reasonable time. Unless the holder does so, the secured party need not comply with the holder's demand under subsection (a)(3).

(c) Application of noncash proceeds. A secured party need not apply or pay over for application noncash proceeds of disposition under Title 9-610 unless the failure to do so would be commercially unreasonable. A secured party that applies or pays over for application noncash proceeds shall do so in a commercially reasonable manner.

(d) Surplus or deficiency if obligation secured. If the security interest under which a disposition is made secures payment or performance of an obligation, after making the payments and applications required by subsection (a) and permitted by subsection (c):

(1) unless subsection (a)(4) requires the secured party to apply or pay over cash proceeds to a consignor, the secured party shall account to and pay a debtor for any surplus; and

(2) the obligor is liable for any deficiency.

(e) Calculation of surplus or deficiency in disposition to secured party or related person. Following a disposition to the secured party or a person related thereto, the surplus or deficiency is calculated based on the amount of proceeds that would have been realized in a hypothetical disposition complying with this part to a person other than the secured party or a person related thereto, if the debtor establishes that the amount of proceeds of the actual disposition is significantly below the range of proceeds that would have been brought by the hypothetical disposition. For purposes of this section, a secondary obligor is a person related to the secured party.

(f) Cash proceeds received by junior secured party. A secured party that receives cash proceeds of a disposition in good faith and without knowledge that the receipt violates the rights of the holder of a security interest or other lien that is not subordinate to the security interest under which the disposition is made:

(1) takes the cash proceeds free of the security interest or other lien;

(2) is not obligated to apply the proceeds of the disposition to the satisfaction of obligations secured by the security interest or other lien; and

(3) is not obligated to account to or pay the holder of the security interest or other lien for any surplus.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-615, LLOjibwe JCT9 STO § 9-615




LLOjibwe JCT9 STO § 9-616
9-616. Explanation of Calculation of Surplus or Deficiency

(a) Explanation of calculation. In a consumer transaction, a secured party must provide the debtor or consumer obligor a reasonably detailed explanation in a record of the manner in which any surplus or deficiency was calculated if the debtor or consumer obligor demands such an explanation or, in any event, ten (10) tribal business days before commencing an action for a deficiency.

(b) Charges for responses. Each debtor or consumer obligor is entitled without charge to one response to a request under this section during any six-month period in which the secured party did not send to the debtor or consumer obligor an explanation pursuant to subsection (b)(1). The secured party may require payment of a charge not exceeding $25 for each additional response.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-616, LLOjibwe JCT9 STO § 9-616




LLOjibwe JCT9 STO § 9-617
9-617. Rights of Transferee of Collateral

(a) Effects of disposition. A secured party's disposition of collateral after default:

(1) transfers to a transferee for value all of the debtor's rights in the collateral;

(2) discharges the security interest under which the disposition is made; and

(3) discharges any subordinate security interest or other subordinate lien.

(b) Rights of good-faith transferee. A transferee that acts in good faith takes free of the rights and interests described in subsection (a), even if the secured party fails to comply with this ordinance or the requirements of any judicial proceeding.

(c) Rights of other transferee. If a transferee does not take free of the rights and interests described in subsection (a), the transferee takes the collateral subject to:

(1) the debtor's rights in the collateral;

(2) the security interest under which the disposition is made; and

(3) any other security interest or other lien.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-617, LLOjibwe JCT9 STO § 9-617




LLOjibwe JCT9 STO § 9-618
9-618. Rights and Duties of Certain Secondary Obligors

(a) Rights and duties of secondary obligor. A secondary obligor acquires the rights and becomes obligated to perform the duties of the secured party after the secondary obligor:

(1) receives an assignment of a secured obligation from the secured party;

(2) receives a transfer of collateral from the secured party and agrees to accept the rights and assume the duties of the secured party; or

(3) is subrogated to the rights of a secured party with respect to collateral.

(b) Effect of assignment, transfer, or subrogation. An assignment, transfer, or subrogation described in subsection (a):

(1) is not a disposition of collateral under Title 9-610; and

(2) relieves the secured party of further duties under this ordinance.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-618, LLOjibwe JCT9 STO § 9-618

LLOjibwe JCT9 STO § 9-619
9-619. Transfer of Record or Legal Title

(a) “Transfer statement.” In this section, “transfer statement” means a record authenticated by a secured party stating:

(1) that the debtor has defaulted in connection with an obligation secured by specified collateral;

(2) that the secured party has exercised its post-default remedies with respect to the collateral;

(3) that, by reason of the exercise, a transferee has acquired the rights of the debtor in the collateral; and

(4) the name and mailing address of the secured party, debtor, and transferee.

(b) Effect of transfer statement. A transfer statement entitles the transferee to the transfer of record of all rights of the debtor in the collateral specified in the statement in any official filing, recording, registration, or certificate-of-title system covering the collateral. If a transfer statement is presented with the applicable fee and request form to the official or office responsible for maintaining the system, the official or office shall:

(1) accept the transfer statement;

(2) promptly amend its records to reflect the transfer; and

(3) if applicable, issue a new appropriate certificate of title in the name of the transferee.

(c) Transfer not a disposition; no relief of secured party's duties. A transfer of the record or legal title to collateral to a secured party under subsection (b) or otherwise is not of itself a disposition of collateral under this ordinance and does not of itself relieve the secured party of its duties under this ordinance.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-619, LLOjibwe JCT9 STO § 9-619



LLOjibwe JCT9 STO § 9-620
9-620. Acceptance of Collateral in Full or Partial Satisfaction of Obligation; Notification of Proposal; Effect of Acceptance; Compulsory Disposition of Collateral

(a) Proposal to accept collateral in full or partial satisfaction of obligation. Except as provided in subsection (e), a secured party may, after default, propose to retain the collateral in full satisfaction of the obligation it secures or, in a transaction other than a consumer transaction, in partial satisfaction of such obligation.

(b) Notification of proposal to accept collateral. The secured party shall send notice of such proposal to:

(1) the debtor;

(2) any person from whom the secured party has received, before the debtor consented to the acceptance, a signed notification of a claim of an interest in the collateral;

(3) any person that, fourteen (14) calendar days before the debtor consented to the acceptance, held a security interest in or other lien on the collateral perfected by means of a financing statement or compliance with other law (Title 9-311(a)) that makes such interest reasonably discoverable; and

(4) if the proposal is for partial satisfaction of the obligation, any secondary obligor.

(c) Conditions to acceptance. The proposal is not effective unless it is covered by subsection (a) and:

(1) the debtor consents to the acceptance in a record signed after default;

(2) no other person specified in subsection (b), and no other person holding an interest in the collateral subject to the secured party's interest, objects to the acceptance within fourteen (14) tribal business days after notification was sent;

(3) if the collateral is consumer goods, the collateral is not in the possession of the debtor when the debtor consents to the acceptance

(d) Effect of acceptance. A secured party's acceptance of collateral pursuant to this section

(1) discharges the obligation to the extent consented to by the debtor;

(2) transfers to the secured party all of the debtor's rights in the collateral;

(3) discharges the security interest that is the subject of the debtor's consent, and any security interest or other lien or interest that is subordinate thereto, even if the secured party accepting the collateral fails to comply with this article.

(e) Mandatory disposition of consumer goods. A secured party that has taken possession of collateral shall dispose of the collateral pursuant to Titles 9-610 through 9-616 if:

(1) 60 percent of the cash price has been paid in the case of a purchase-money security interest in consumer goods; or

(2) 60 percent of the principal amount of the obligation secured has been paid in the case of a non-purchase-money security interest in consumer goods. Such disposition shall be made within ninety (90) calendar days after taking possession, or within any longer period to which the debtor and all secondary obligors have agreed in an agreement to that effect entered into and signed after default.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-620, LLOjibwe JCT9 STO § 9-620




LLOjibwe JCT9 STO § 9-621
9-621. [Reserved]

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-621, LLOjibwe JCT9 STO § 9-621




LLOjibwe JCT9 STO § 9-622
9-622. [Reserved]

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-622, LLOjibwe JCT9 STO § 9-622




LLOjibwe JCT9 STO § 9-623
9-623. Right to Redeem Collateral

(a) Persons that may redeem. A debtor, any secondary obligor, or any other secured party or lien holder may redeem collateral.

(b) Requirements for redemption. To redeem collateral, a person shall tender:

(1) fulfillment of all obligations secured by the collateral; and

(2) the reasonable expenses and attorney's fees described in Title 9-615(a)(1), dealing with application of proceeds of disposition.

(c) When redemption may occur. A redemption may occur at any time before a secured party:

(1) has collected collateral under Title 9-607;

(2) has disposed of collateral or entered into a contract for its disposition under Title 9-610; or

(3) has accepted collateral in full or partial satisfaction of the obligation it secures under Title 9-620.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-623, LLOjibwe JCT9 STO § 9-623




LLOjibwe JCT9 STO § 9-624
9-624. Waiver

(a) Waiver of disposition notification. A debtor or secondary obligor may waive the right to notification of disposition of collateral under Title 9-611 only by an agreement to that effect entered into and signed after default.

(b) Waiver of mandatory disposition. A debtor may waive the right to require disposition of collateral under Title 9-620(e), which deals with mandatory disposition of consumer goods, only by an agreement to that effect entered into and signed after default.

(c) Waiver of redemption right. In a transaction other than a consumer transaction, a debtor or secondary obligor may waive the right to redeem collateral under Title 9-623 only by an agreement to that effect entered into and signed after default. In a consumer transaction, a debtor or secondary obligor may not waive such right.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-624, LLOjibwe JCT9 STO § 9-624

 

SUBCHAPTER 2. NONCOMPLIANCE WITH [ACT]

LLOjibwe JCT9 STO § 9-625
9-625. Remedies for Secured Party's Failure to Comply with Ordinance

(a) Judicial orders concerning noncompliance. If it is established that a secured party is not proceeding in accordance with this ordinance, a court may order or restrain collection, enforcement, or disposition of collateral on appropriate terms and conditions.

(b) Damages for noncompliance. Subject to subsections (c), (d), and (f), a person is liable for damages in the amount of any loss caused by a failure to comply with this ordinance. Loss caused by a failure to comply may include loss resulting from the debtor's inability to obtain, or increased costs of, alternative financing.

(c) Persons entitled to recover damages; statutory damages where collateral is consumer goods. Except as otherwise provided in Title 9-628, which deals with the non-liability and limitations on liability of a secured party and the liability of a secondary obligor:

(1) a person that, at the time of the failure, was a debtor, was an obligor, or held a security interest in or other lien on the collateral may recover damages under subsection (b) for its loss; and

(2) if the collateral is consumer goods, a person that was a debtor or a secondary obligor at the time a secured party failed to comply with this part may recover for that failure in any event an amount not less than the credit service charge plus 10 percent of the principal amount of the obligation or the time-price differential plus 10 percent of the cash price.

(d) Recovery when deficiency eliminated or reduced. A debtor whose deficiency is eliminated under Title 9-626, which deals with actions in which a deficiency or surplus is in issue, may recover damages for the loss of any surplus.

(e) Statutory damages: noncompliance with specified provisions. In addition to any damages recoverable under subsection (b), the debtor, consumer obligor, or person named as a debtor in a filed record, as applicable, may recover $500 in each case from a person that:

(1) fails to comply with the provisions of this ordinance dealing with additional duties of a secured party having control of an investment account (Title 9-205(b));

(2) fails to comply with the provisions of this ordinance dealing with duties of a secured party if an account debtor has been notified of assignment (Title 9-205(c));

(3) files a record that the person is not entitled to file under Title 9-502(g);

(4) fails to file, cause to be filed or send a termination statement as required by Title 9-502(f);

(5) fails to comply with the provisions of this ordinance dealing with explanations of calculations of surplus or deficiency (Title 9-616(a)), and whose failure is part of a pattern, or consistent with a practice, of noncompliance.

(f) Statutory damages: noncompliance with the provisions of this ordinance dealing with a request for an accounting. A debtor or consumer obligor may recover damages under subsection (b) and, in addition, $500 in each case from a person that, without reasonable cause, fails to comply with a request for an accounting (Title 9-207). A recipient of a request under Title 9-207 which never claimed an interest in the collateral or obligations that are the subject of a request under that section has a reasonable excuse for failure to comply with the request within the meaning of this subsection.

(g) Limitation of security interest: noncompliance with ordinance. If a secured party fails to comply with a request regarding a list of collateral or a statement of account under Title 9-207, the secured party may claim a security interest only as shown in the list or statement included in the request as against a person that is reasonably misled by the failure.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-625, LLOjibwe JCT9 STO § 9-625



LLOjibwe JCT9 STO § 9-626
9-626. Action in Which Deficiency or Surplus is in Issue

(a) Applicable rules if amount of deficiency or surplus in issue. In an action arising from a transaction, other than a consumer transaction, in which the amount of a deficiency or surplus is in issue, the following rules apply:

(1) A secured party need not prove compliance with the provisions of this chapter relating to collection, enforcement, disposition, or acceptance unless the debtor or a secondary obligor places the secured party's compliance in issue.

(2) If the secured party's compliance is placed in issue, the secured party has the burden of establishing that the collection, enforcement, disposition, or acceptance was conducted in accordance with this chapter.

(3) Except as otherwise provided in the provisions of this ordinance dealing with non liability and limitations on liability of a secured party or secondary obligor (Title 9-628), if a secured party fails to prove that the collection, enforcement, disposition, or acceptance was conducted in accordance with the provisions of this chapter relating to collection, enforcement, disposition, or acceptance, the liability of a debtor or a secondary obligor for a deficiency is subject to setoff for an amount as stated in the provision of this ordinance dealing with damages for noncompliance (Title 9-625(b)), which may be measured by the amount recovered for conversion of collateral.

(4) For purposes of paragraph (3), the liability of the debtor or a secondary obligor is calculated on the presumption that the proceeds of disposition equal the sum of the secured obligation, expenses, and allowable attorney's fees, but the secured party may rebut the presumption.

(b) Consumer transactions; no inference. The limitation of the rules in subsection (a) to transactions other than consumer transactions is intended to leave to the Court the determination of the proper rules in consumer transactions. The Court may not infer from that limitation the nature of the proper rule in consumer transactions and may continue to apply established approaches.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-626, LLOjibwe JCT9 STO § 9-626




LLOjibwe JCT9 STO § 9-627
9-627. Determination of Whether Conduct was Commercially Reasonable

(a) Greater amount obtainable under other circumstances; no preclusion of commercial reasonableness. The fact that a greater amount could have been obtained by a collection, enforcement, disposition, or acceptance at a different time or in a different method from that selected by the secured party is not of itself sufficient to preclude the secured party from establishing that the collection, enforcement, disposition, or acceptance was made in a commercially reasonable manner.

(b) Dispositions that are commercially reasonable. A disposition of collateral is made in a commercially reasonable manner if the disposition is made:

(1) in the usual manner on any recognized market;

(2) at the price current in any recognized market at the time of the disposition; or

(3) otherwise in conformity with reasonable commercial practices among dealers in the type of property that was the subject of the disposition.

(c) Approval by court or on behalf of creditors. A collection, enforcement, disposition, or acceptance is commercially reasonable if it has been approved:

(1) in a judicial proceeding;

(2) by a bona fide creditors' committee;

(3) by a representative of creditors; or

(4) by an assignee for the benefit of creditors.

Such approval need not be obtained, and lack of approval does not mean that the collection, enforcement, disposition, or acceptance is not commercially reasonable.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-627, LLOjibwe JCT9 STO § 9-627




LLOjibwe JCT9 STO § 9-628
9-628. Nonliability and Limitation on Liability of Secured Party; Liability of Secondary Obligor

(a) Limitation of liability of secured party for noncompliance with ordinance. Unless a secured party knows that a person is a debtor or obligor, knows the identity of the person, and knows how to communicate with the person:

(1) the secured party is not liable to the person, or to a secured party or lien holder that has filed a financing statement against the person, for failure to comply with this ordinance; and

(2) the secured party's failure to comply with this ordinance does not affect the liability of the person for a deficiency.

(b) Limitation of liability based on status as secured party. A secured party is not liable because of its status as secured party:

(1) to a person that is a debtor or obligor, unless the secured party knows:

(A) that the person is a debtor or obligor;

(B) the identity of the person; and

(C) how to communicate with the person; or

(2) to a secured party or lien holder that has filed a financing statement against a person, unless the secured party knows:

(A) that the person is a debtor; and

(B) the identity of the person.

(c) Limitation of liability if reasonable belief that transaction not a consumer transaction or collateral is not consumer goods. A secured party is not liable to any person, and a person's liability for a deficiency is not affected, because of any act or omission arising out of the secured party's reasonable belief that a transaction is not a consumer transaction or that goods are not consumer goods, if the secured party's belief is based on its reasonable reliance on:

(1) a debtor's representation concerning the purpose for which collateral was to be used, acquired, or held; or

(2) an obligor's representation concerning the purpose for which a secured obligation was incurred.

(d) Limitation of liability for statutory damages. A secured party is not liable to any person under Title 9-625(c)(2), which deals with statutory damages where the collateral is consumer goods, for its failure to comply with Title 9-616, which deals with explanations of calculations of surplus or deficiency.

(e) Limitation of multiple liability for statutory damages. A secured party is not liable under Title 9-625(c)(2), which deals with statutory damages where the collateral is consumer goods, more than once with respect to any one secured obligation.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-628, LLOjibwe JCT9 STO § 9-628




LLOjibwe JCT9 STO § 9-629
9-629. Attorney's Fees in Certain Transactions

If the secured party's compliance with this ordinance is placed in issue in an action, the following rules apply:

(1) If the secured party would have been entitled by agreement to attorney's fees as the prevailing party, and the original principal amount of the indebtedness secured does not exceed [$25,000], a debtor or obligor prevailing on the issue is entitled to the costs of the action and reasonable attorney's fees.

(2) In other cases, the Court may award to a consumer debtor or consumer obligor prevailing on that issue the costs of the action and reasonable attorney's fees.

(3) In determining the attorney's fees, the amount of the recovery on behalf of the prevailing debtor or obligor is not a controlling factor.

Effective July 1, 2010.

Leech Lake Ojibwe Jud. Code, T. 9, Sec. Trans. Ord. § 9-629, LLOjibwe JCT9 STO § 9-629

 

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